Brand becomes new bottom line

The wave of corporate scandals has forced the world's biggest corporations to focus more on protecting their brand, with some even claiming it is now more important than profitability, according to a survey of chief executives and organisation leaders at the World Economic Forum in Davos.

The survey, which was sent to all 1500 Davos attendees and attracted a 10 per cent response rate, found that 77 per cent believed reputation had become more important in the past two years.

More remarkably, 24 per cent said corporate reputation was the most important measure of success, compared with 17 per cent who nominated profitability.

The reputation yardstick was also well ahead of return on investment (13 per cent), sustainability (6 per cent) and sharemarket performance (5 per cent).

The only area deemed to be more important was quality of products and services, at 27 per cent.

The survey found that 59 per cent of respondents estimated that reputation represented 40 per cent of what a company was worth.

Only 4 per cent believed market capitalisation was not attributable to brand or reputation, and only 3 per cent said reputation had become less important.

Business leaders agreed that the world was becoming more prosperous - and more precarious. According to the survey, 59 per cent said the next generation was likely to live in a prosperous world. At the same time, only 27 per cent said it was going to be safe.